Transcript The Nature of Services

Chapter 2
The Nature of Services
Learning Objectives
1.
2.
3.
4.
5.
Service process matrix.
The service package.
Distinctive characteristics of a service
operation.
The strategic classification of services.
The role of a service manager from an opensystems view of service.
Service/Product Bundle
Element
Business
Core Goods
Example
Custom clothier
Core Service
Example
Business hotel
Core
Business suits
Room for the night
Peripheral
Goods
Peripheral
Service
Variant
Garment bag
Bath robe
Deferred payment
plans
In house restaurant
Coffee lounge
Airport shuttle
The Service Process Matrix
Degree of Interaction and Customization
Low
Degree
of labor Intensity
High
Low
Service factory:
* Airlines
* Trucking
* Hotels
* Resorts/ recreation
Mass service:
* Retailing
* Wholesaling
* Schools
* Retail aspects of
commercial banking
High
Service shop:
* Hospitals
* Auto repair
* Other repair services
Professional service:
* Doctors
* Lawyers
* Accountants
* Architects
The Service Package
1. Supporting Facility
Examples are golf course, ski lift, hospital, airplane.
2. Facilitating Goods
Examples are food items, legal documents, golf clubs, medical history.
3. Information
Examples are patient medical records, seats available on a flight, customer
preferences, location of customer to dispatch a taxi.
4. Explicit Services
Examples are quality of meal, attitude of the waiter, on-time departure.
5. Implicit Services
Examples are privacy of loan office, security of a well lighted parking lot.
Distinctive Characteristics of Services
 Customer
Participation
 Simultaneity
 Perishability
 Intangibility
 Heterogeneity
Strategic Service Classification
(Nature of the Service Act)
Direct Recipient of the Service
Nature of
the Service Act
Tangible actions
People
People’s bodies:
Health care
Passenger transportation
Beauty salons
Exercise clinics
Restaurants
People’s minds:
Intangible actions
Education
Broadcasting
Information services
Theaters
Museums
Things
Physical possessions:
Freight transportation
Repair and maintenance
Veterinary care
Janitorial services
Laundry and dry cleaning
Intangible assets:
Banking
Legal services
Accounting
Securities
Insurance
Strategic Service Classification
(Relationship with Customers)
Type of Relationship between Service Organization and Its Customers
Nature of
Service Delivery
“Membership” relationship
No formal relationship
Continuous delivery
of service
Discrete transactions
Insurance
Telephone subscription
Electric Utility
Banking
Long-distance phone calls
Theater series tickets
Transit pass
Sam’s Wholesale Club
Airline frequent flyer
Radio station
Police protection
Lighthouse
Public Highway
Restaurant
Pay phone
Toll highway
Movie theater
Public transportation
Strategic Service Classification
(Customization and Judgment)
Extent to Which Service Characteristics Are Customized
Extent to Which Personnel
Exercise Judgment in Meeting
Customer Needs
High
Low
Surgery
High
Taxi services
Gourmet restaurant
Telephone service
Hotel services
Low
Retail banking
Cafeteria
Preventive health programs
Education (large classes)
Family restaurant
Public transportation
Spectator sports
Movie theater
Institutional food service
Strategic Service Classification
(Nature of Demand and Supply)
Extent of Demand Fluctuation over Time
Extent to which Supply
Is Constrained
Peak demand can
usually be met
without a major delay
Peak demand regularly
exceeds capacity
Wide
Narrow
Electricity
Insurance
Telephone
Legal services
Police emergency
Banking
Hospital maternity unit
Laundry and dry cleaning
Tax preparation
Fast food restaurant
Passenger transportation
Movie theater
Hotels and motels
Gas station
Strategic Service Classification
(Method of Service Delivery)
Availability of Service Outlets
Nature of Interaction
between Customer and
Service Organization
Single site
Multiple site
Customer travels to
service organization
Theater
Bus service
Barbershop
Fast-food chain
Service provider
travels to customer
Taxi
Mail delivery
Pest control service
AAA emergency repairs
Credit card company
Broadcast network
Local TV station
Telephone company
Transaction is at
arm’s length
Open Systems View of Services
Service Process
Consumer arrivals
(input)
Consumer participant
Consumer-Provider
interface
Control
departures
( output)
Production function:
Alter
Monitor and control process
demand
Marketing function:
Interact with consumers
Control demand
Modify as necessary
Define standard
Communicate
by advertising
Service package
Supporting facility
Facilitating goods
Explicit services
Implicit services
Evaluation
Criteria
Measurement
Monitor
Service Operations Manager
Customer demand
Perceived needs
Location
Consumer
Service personnel
Schedule
supply
Basis of
selection
Empowerment
Training
Attitudes